Money Laundering Regulations: Money Service Business registration
Find out if you need to register as a Money Service Business with HMRC.
Businesses that exchange currency, transmit money or cash cheques for their customers are known as ‘Money Service Businesses’. This guide will help you decide if you need to register as a Money Service Business with HM Revenue and Customs (HMRC) and includes links to more information about how to register.
Money Service Businesses
The term Money Service Business has a special meaning under the Money Laundering Regulations 2007. Your business is a Money Service Business under these regulations if it:
- acts as a bureau de change - even if this is on a ship that isn’t always in UK territorial waters
- transmits money, or any representation of money, in any way (just collecting and delivering money as a ‘cash courier’ isn’t transmitting money)
- cashes cheques that are payable to your customers
Even if your business only does one of these things, it is still classed as a Money Service Business.
HMRC is the supervisory body for most Money Service Businesses under the Money Laundering Regulations. If you run a Money Service Business it’s your responsibility to register with HMRC unless you’re already supervised by the Financial Conduct Authority (FCA) for the purposes of the Money Laundering Regulations. You mustn’t act as a Money Service Business until you’re either registered with HMRC or supervised by the FCA.
Pawnbrokers who act as Money Service Businesses must register with HMRC, who will supervise both the pawnbroking and the money service aspects of their business.
When you don’t need to register as a Money Service Business
Occasional money service activities
If you exchange currency or cash cheques only occasionally, or only on a limited basis, then you don’t have to register as a Money Service Business if:
- your total turnover from these money service activities is no more than £64,000 a year
- turnover from money service activities is no more than 5 per cent of your total annual turnover
- currency exchange or cheque cashing transactions worth more than €1,000 must be limited to one per customer - this could be one single transaction or a series of smaller transactions that seem to be linked
- the money service activities must be secondary to your main business activity and directly related to it
- the currency exchange or cheque cashing service must only be available to customers of the main business - it mustn’t be available to the public
- your business isn’t operating as a Trust or Company Service Provider or an Accountancy Service Provider
You’ll need to meet all of these conditions, otherwise you have to register.
Transmitting money not by way of business
If you transmit money from time to time but not by way of business you may not have to register. If you think you fall into this category then you should contact HMRC to check.
Acting as a cash courier
Cash couriers collect money from their customers and deliver it to someone else. They do jobs like re-stocking cash dispensers and delivering cash for shops. This is not transmitting money so it’s not a Money Service Business activity. If you just operate as a cash courier you don’t need to register as a Money Service Business with HMRC.
Consumer credit licenses and Money Laundering Regulations
If you’ve a consumer credit license and also operate as a Money Service Business then HMRC will supervise both your consumer credit activity and your Money Service Business activities. When you put in place anti-money laundering policies and procedures you’ll need to make sure these cover all your activities undertaken under the Money Laundering Regulations.
If you’ve a consumer credit license for your business but you don’t offer Money Service Business activities the FCA will supervise your business as a Consumer Credit Financial Institution under Money Laundering Regulations.
Registering with HMRC as a Money Services Business
If you’re not already supervised by the FCA for the purposes of the Money Laundering Regulations you mustn’t operate as a Money Service Business until you’ve registered with HMRC.